By being an "occasional contributor" it means AOL will be able to minimize future attacks on its ethics as a trusted media publisher because it looks like Mr Arrington won't be writing much.

The move is a big face saver for Mr Arrington's boss, Arianna Huffington, who has had a long battle for media credibility with the Huffington Post, described by many as a blog.

To provide greater credibility, she has hired dozens of top, highly respected journalists and editors from the New York Times, Miami Herald, and other major newspapers and news magazines. These A-list journalists earn salaries of $300K and more. Mr Arrington's position as editor and investor in his beat companies, diverted attention away from Ms Huffington's expensive hiring binge and earnest bid for mainstream media credibility.

Now that Mr Arrington's ability to influence the startup coverage of Techcrunch is minimized, it will be interesting to see what benefits startups will receive from having Crunchfund as an investor. Media coverage is a huge deal for any company and as the media tsunami grows it becomes ever harder and more expensive to be seen above the flood.

Having an influential editor as an investor makes sense and could save startups large amounts of money in PR costs -- as much as $240,000 a year. That's a very big cost for early stage companies so if they can cut their PR budget they can free up additional investment capital.

Mr Arrington will have to convince startups that he brings other benefits other than access to Techcrunch's massive readership.

He could follow the successful examples of VCs that publish a lot about their startup investments, such as Fred Wilson, A VC - based in New York. However, if Mr Arrington were to write about startups, it would likely be barred under standard terms of acquisition and non-competitive clauses.

Mr Arrington might be boxed into a corner regarding what he can write about -- or even write much at all -- given his new minimal role at Techcrunch.